Louisiana is looking at a $313 million—and growing—deficit.
Another Budget Gap?!
Over the course of this year,
lawmakers passed more than $1 billion in new taxes with the goal of stabilizing
Louisiana’s budget woes and righting the financial ship. However, Louisiana
once again finds itself facing a massive budget hole.
The Associated Press reported that there is a $313 million deficit left over from last
year, which is already larger than expected and may also get worse because of
too-optimistic revenue projections. With a state recession in full swing, tax
revenue has been lower than expected. This news comes after the state already borrowed at least $300 million in a short-term
loan in September so that it could pay bills while waiting for tax revenue to
flow in.
Meanwhile, on Nov. 2, the state’s Task Force on Structural Changes in Budget
and Tax Policy released its recommendations for fixing Louisiana’s
ongoing fiscal problems. Among the ideas:
- Eliminating or restricting the
state federal tax deduction for income taxes - Phasing out the inventory tax and
inventory tax credit - Lowering the sales tax rate but
expanding it to more services
Most of the recommendations have
been discussed by the Legislature in the past, but haven’t received enough
support to move forward.
Dawn Starns, NFIB/LA’s state
director, said in a statement that the task force’s report was a good first
step toward finding a permanent solution to the state’s budget crisis: “In
fact, the task force’s No. 1 recommendation sounds like something straight out
of the small business playbook: ‘Avoid budgeting practices that allow for
spending beyond available recurring revenues.’ In other words, stop spending
money you don’t have.
“We look forward to sharing the
task force’s recommendations with our small business members and working with
the Legislature and Gov. Edwards to find a solution that allows the state to
operate without trying to balance the budget on the backs of small businesses.”
